West Viriginia’s Office of the Attorney General released a press
statement titled “Court Enjoins Cavalry Debt Buyers from Collecting Debts.” Prominent debt collector Cavalry Portfolio Services, LLC, was dealt
a huge blow when the State of West Virginia criticized the collection
agency for attempting to collect debts, and filing lawsuits, before it
was licensed.
Unlike California, many states, such as West Virginia, require debt collectors to be licensed. Cavalry obtained a license to collect debt in West Virginia in October of 2010. However, Cavalry had filed approximately 1,300 debt collection lawsuits before it was licensed. It’s those accounts - 743 lawsuits that resulted in around $3 million in judgments against West Virginian consumers- that are in issue. It appears those judgments are now void.
According to the press release:
A court in West Virginia “granted Attorney General Darrell McGraw’s motion for a temporary injunction against Cavalry. It is also ordered the New York-based debt buyers – Cavalry SPV I, Cavalry SPV II, and Cavalry Investments plus a collection affiliate, Cavalry Portfolio Services – to fully comply with the Attorney General’s investigative subpoena.
...
In addition to halting Cavalry’s pending collections lawsuits, the circuit court’s injunction requires Cavalry to stop all wage garnishments and to release all liens filed against West Virginia consumers’ property stemming from judgments obtained by its companies before they became licensed."
Cavalry has been ordered to send written notices to all of the affected consumers. Once the notices are sent, Cavalry “may accept payments made voluntarily” but must first place them into escrow and report all payments received to the Attorney General’s office."
Apparently, anyone served a collections notice prior to Cavalry being licensed in 2010 is now no longer on the hook to the agency.
A copy of the court’s order, which remains in effect until a final hearing, may be obtained on the Attorney General’s website at www.wvago.gov.
California used to require debt collectors to be licensed in order to attempt
to collect debts in the state.
However, the California legislature decided to abandon licensing and instead
regulate debt collectors under the California (Rosenthal) Fair Debt Collection
Practices Act. The Rosenthal Fair Debt Collection Practices Act was enacted
in 1977. Thus, since that time collection agencies operating in California
need not be licensed. However, debt collectors and creditors are strictly
regulated by the California Fair Debt Collection Practices Act (CA FDCPA).
The CA FDCPA prohibits debt collectors as well as original creditors from using any abusive, harassing or misleading practices in an attempt to collect a debt. Furthermore, the CA FDCPA incorporates most of the federal Fair Debt Collection Practices Act, thus giving consumers even greater protection from abusive debt collectors.
Click on this link to learn more about the California Fair Debt Collection Practices Act.